Profit model and algorithm of distribution system for vendor managed inventory

Liu Cheng; Yang Yong-sheng

Article Contents

Article Navigation > Journal of Traffic and Transportation Engineering > 2008 > 8(3): 122-126

Liu Cheng, Yang Yong-sheng. Profit model and algorithm of distribution system for vendor managed inventory[J]. Journal of Traffic and Transportation Engineering, 2008, 8(3): 122-126.

Citation:

Liu Cheng, Yang Yong-sheng. Profit model and algorithm of distribution system for vendor managed inventory[J]. Journal of Traffic and Transportation Engineering, 2008, 8(3): 122-126.

Liu Cheng, Yang Yong-sheng. Profit model and algorithm of distribution system for vendor managed inventory[J]. Journal of Traffic and Transportation Engineering, 2008, 8(3): 122-126.

Citation:

Liu Cheng, Yang Yong-sheng. Profit model and algorithm of distribution system for vendor managed inventory[J]. Journal of Traffic and Transportation Engineering, 2008, 8(3): 122-126.

PDF( 442 KB)

Profit model and algorithm of distribution system for vendor managed inventory

Liu Cheng^1
,,
Yang Yong-sheng²

1.
School of Mathematical Science and Computing Technology, Central South University, Changsha 410075, Hunan, China
2.
Department of Arts and Law, Changsha Social Work College, Changsha 410004, Hunan, China

More Information

Author Bio:
Liu Cheng(1966-), female, PhD, associate professor, +86-731-8673067, liucheng663773@sohu.com
Received Date: 2008-01-02
Publish Date: 2008-06-25

Abstract

Abstract

In order to increase the profit of distribution system, the distribution network was studied whose topology structure was one distributor or supplier and many retailers, the system optimization was analyzed when the product demand had stochastic price elasticity, retailer inventory control policy of cycle check and vendor managed inventory (VMI)mode were adopted, the profit optimization model and solving algorithm of distribution system were established. Calculation result shows that the ratio between supplying goods price and normal wholesale price doesn't affect the model optimal solution, total sales and suppliers' profits decrease with the increase of goods retail prices, but the retailers' profits increase. So the ratio between supplying goods price and normal wholesale price can be determined through the negotiation when total system profit is maximal, and suppliers' enthusiasm can be aroused when a certain proportion profit is transferred from retailers to suppliers.
- supply chain management,
- vendor managed inventory,
- profit optimization model,
- distribution system,
- inventory control policy

FullText(HTML)

References(13)

References

[1]	Du Wen, Yuan Qing-da, Zhou Zai-ling. Analysis of the process of stochastic inventory/transportation integrated optimization problem[J]. China Journal of Highway and Transport, 2004, 17(1): 114-118. (in Chinese) doi: 10.3321/j.issn:1001-7372.2004.01.027
[2]	Chen Zhi-ya, Fu Yan-bing, Lu Feng-shan, et al. Stock and transport service of enterprise supply chain[J]. Journal of Traffic and Transportation Engineering, 2004, 4(2): 85-88. (in Chinese) doi: 10.3321/j.issn:1671-1637.2004.02.020
[3]	Lee H, Padmanabhan P, Whang S. Information: distortion in supply chain: the bull whip effect[J]. Management Science, 1997, 43(4): 546-558. doi: 10.1287/mnsc.43.4.546
[4]	Chen F, Drezner Z, Ryan J K, et al. Quantifying the bull-ship effect in a simple supply chain: the impact of forecasting, lead times and information[J]. Management Science, 2000, 46(3): 436-443. doi: 10.1287/mnsc.46.3.436.12069
[5]	Clark T, Hammond J. Reengineering channel reordering processes to improve total supply chain performance[J]. Production and Operation Management, 1997, 6(3): 248-265. doi: 10.1111/j.1937-5956.1997.tb00429.x
[6]	Hol mstrom J. Business process innovation in the supply chain—a case study of implementing vendor managed inventory[J]. Europen Journal of Purchasing & Supply Management, 1998, 4(2/3): 127-131.
[7]	Cetinkaya S, Lee C Y. Stock replenishment and shipment scheduling for vendor-managed inventory systems[J]. Management Science, 2000, 46(2): 217-232. doi: 10.1287/mnsc.46.2.217.11923
[8]	Dong Yan, Xu Ke-feng. A supply chain model of vendor managed inventory[J]. Transportation Research Part E, 2002, 38(2): 75-95. doi: 10.1016/S1366-5545(01)00014-X
[9]	Zhu Hong, Guo Hai-feng, Huang Xiao-yuan. Profit model of vendor managed inventory andits optimized policy[J]. Journal of Northeastern University: Nature Science, 2004, 25(5): 505-507. (in Chinese) doi: 10.3321/j.issn:1005-3026.2004.05.027
[10]	Guo Hai-feng, Huang Xiao-yuan, Qiu Ruo-zhen. Optimized purchase quantity and profit of vendor managed inventory[J]. Journal of Northeastern University: Nature Science, 2005, 26(2): 186-189. (in Chinese) doi: 10.3321/j.issn:1005-3026.2005.02.023
[11]	Luo Bing, Yang Shuai, Lu Na. Avendor-managed inventory model with partial backlogging and time value of costs[J]. Control and Decision, 2005, 20(9): 1061-1064. (in Chinese) doi: 10.3321/j.issn:1001-0920.2005.09.021
[12]	Ye Zhi-jian, Du Wen, Wang Qing-rong, et al. Delivery consolidation and stock replenishment in VMI system[J]. Journal of Transportation Systems Engineering and Information Technology, 2003, 3(4): 82-88. (in Chinese) doi: 10.3969/j.issn.1009-6744.2003.04.016
[13]	Gao Jun-jun, Wang Ying-jun, Guo Ya-jun. Profit model for multiple product distribution systems[J]. Systems Engineering—Theory Methodology Application, 2005, 14(2): 124-130. (in Chinese) https://www.cnki.com.cn/Article/CJFDTOTAL-XTGL200502006.htm